Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of diversified solutions across senior-level executive search, leadership, assessment and development, team and organizational effectiveness, and culture shaping. Every day, we speak with leaders around the world about how they're meeting rising expectations and managing through volatile times, thinking about individual leaders, teams, organizations, and society. Thank you for joining the conversation.

Obinna Onyeagoro: Hello, I'm Obi Onyeagoro, partner in Heidrick & Struggles’ London office. I'm a member of the Global Financial Services Practice, and I lead the Infrastructure Practice. In today's podcast, I'm excited to speak to Allan Swan, President of Panasonic Energy North America. Allan has over two decades of experience in the energy sector and has been at the forefront of driving innovative solutions and strategic transformations. He is adept at leading diverse teams across global markets and navigating complex cultural landscapes. Allan, welcome and thank you for taking the time to speak with us today.

Allan Swan: Thank you. Great to be here.

Obinna Onyeagoro: Today we're going to talk about culture as a tool for leadership and transformation, and I'm really excited to hear from you how you would describe the way in which Panasonic Energy leverages its culture to drive both performance and innovation. 

Allan Swan: Great question for me to start with. So, first of all, there's Panasonic, and Panasonic has seven principles—seven guiding principles—and those seven principles bring a lot of integrity and value, and I'm just going to run through them very, very quickly because everything I'm going to talk about after that is based on these seven principles. So, the first one is contribution to society. The second one is fairness and honesty. The third one is cooperation and team spirit. Then it's untiring effort for improvement, courtesy and humility, adaptability and gratitude. The reason that's important is because when you work for Panasonic, those are the principles that everyone understands. Everybody. And everything I'm going to talk about from the Panasonic Energy business comes from those principles, fundamentally. So, there's a lot of value and integrity—obviously, it's a Japanese company, and there's a lot of value and integrity in there, which is what then drives us to do everything else. So that's really where it all comes from. And then we drive in to things like high performance culture, servant leadership, and then one team, and I'll happily break that down and explain to you how that all works. 

Obinna Onyeagoro: It's interesting because in my experience and in my line of work, working with leaders, not everyone understands the value of culture. And the best leaders, I find, the ones who are the most, I guess, inspiring, and the ones who I've seen drive the most impact and success in terms of performance, understand that interchange between—and the correlation between—culture and performance, and culture and leadership. I'm curious, how did you get to understand the value of culture? 

Allan Swan: Previously, I'd been searching for something. I'd been in many companies where it's silo-based—I'm going to give you all the problems here: It's silo-based, so each function doesn't talk to each other. Then there's tailgating on problems, so, everybody's like well, if Obi’s the one that's in trouble, everyone's just going to tailgate behind you, right? So, you get that situation. And there was a lack of momentum, to be honest with you. So, we were constantly looking for what could we do different? And I was introduced to high-performance culture when I was actually at Rolls Royce, in aerospace. I was introduced to high performance culture. It didn't quite make it, but some of the principles in there really struck me very strongly and so, when I moved over to Panasonic Energy, and with the Japanese culture, the American culture, and tried to bring those two quite different ways of thinking together, the high-performance culture was able to make a big difference.

So, the high-performance culture basically says we're servant leaders. So what I tell everybody who works in our organization —and there's about 6,000 people right now and that'll move up to 10,000 by the time we get to the end of 2026—we say, “As servant leaders, our only job as a leadership team is to make sure you’ve got the tools that you need to do your job. That's our job.” Very, very simple. Our job as leaders is to give them the tools that they need in order to do their job. And the other thing that goes with that is one team and how we do things. So, everything we do, the Gigafactory in Nevada or the Gigafactory in Kansas, whether we're measuring on the line or whether we’re measuring at an executive level, we measure the same things. And at an executive level, it's just a multiple of all the departments. And it doesn't matter whether you're in finance, HR, or actually on the line producing things, or you’re maintenance, it doesn't matter, we measure the same things. So, there's a real consistency and a real language, if you like, that everyone gets. So, you know your contribution to the business. Quite frankly, whether you're, you know, you're cleaning the toilet or whether you're the CFO of the business, it doesn't matter, everybody knows how they're contributing to the business and that is part of what high-performance culture is. And when you have that situation, one team, 6,000 people all going in the same direction, it is powerful. There is nothing that gets in your way and you just break records every week, every month, every year, you're just constantly improving on the business, and you can look back and look at where you started, it's an amazing improvement and winning atmosphere that you create in that situation, it's absolutely unbelievable, and there's a quick quote that I use sometimes, which is this: I don't look at KPIs. I don’t look at KPIs. I see KPIs, I see them every month, of course, but that's not what I'm looking for. Because I know if I've got the people in the right culture working on the right things and we're hitting the targets that we expect to hit, and we do, then the rest looks after itself. So basically, the inputs look after the outputs and the outputs, I never concern myself. I only look at the people and how we're working with the people and how we're working in a general direction going forward. And if that's all clicking, the numbers will look after themselves.

Obinna Onyeagoro: That's extraordinary. If we think about this from a diagnostic perspective, how do you know that the way to supercharge your performance or that your leadership challenge—how do you know it's a culture issue? How do you know it could be improved or fixed with culture, whether it's performance or otherwise? 

Allan Swan: So, first of all, any problem, any problem, we accept with a grateful heart. We like problems. So culturally, that's quite a difference from certainly where I've worked in the past and where I've been in my experience. So, we accept all problems with a grateful heart. We want problems. That's number one. Number two, there is not one problem ever that we cannot fix. Ever. And I can say that 100%. 100%, there's not one problem we can't fix. The key is sometimes you have to dissect a problem and break it down a little bit more to actually get to the teeth of it, that kind of thing, and/or you have to focus a little bit differently. So sometimes the focus isn't good enough, but the actual problem itself, there is not one problem we can't fix. And I tell my 6,000 employees, I tell them, there's not one problem we can't fix. That allows us to have a quite a different mindset on how we tackle it and as we do tackle it—and we do—then it just gives everyone a lift. It's all about positivity and how we attack things. 

Obinna Onyeagoro: Thinking about your body of experience, what cultural initiatives or practices have proven most effective in transforming leadership within your organization—transforming it for the better?

Allan Swan: We have a tool called CIG. CIG means control, influence, gravity, and if a team on the floor—I'll just pick on the floor, right—if a team on the floor is working and they have a problem, they ask themselves can they control the problem? In other words, can they fix the problem based on what they have and their resources? If the answer is yes, it stays in the control box and they record that accordingly. If the answer is no; so, let's say they're on the floor, there's an engineering issue, and they have to call in the quality team, that becomes influence because the control, the team cannot control it themselves, so it goes to influence. So, the team talk to quality, quality talk to the team, and they put a date on it. I'm being quite prescriptive, because this is how it works. So, they put a date on it, okay, we're going to fix it, and let's say they're going to fix it by today, right? Boom. The quality team, they take over that problem. If they fail to hit that date, it moves to gravity, and in gravity, it means it moves to the next executive higher, and then that executive takes over. 

A couple of key things. Number one, principle. When that team are talking about that problem, that executive has to go to that team and tell them what the problem is, so now he works for them or she works for them. Number two, the date is key; the date takes all the emotion out. So, nobody's blaming anybody, because the date is what's moving it up the escalation feature. Number three, the team who had the problem in the first place and asked for help only focus on what they can control. They don't focus on the piece they gave to the quality team, because the quality team now manages it on their behalf. So, all of a sudden, you've got people who are saying this is great, I'm working on what I can do and I know I can make a difference; I've got a problem and I've given it to my quality colleague, and my quality colleague now has that on my behalf. So, the team ethos kicks in as well. And what that does is it means one team, everybody controls what they can control, and they don't worry about things that are out of their control, and the whole organization works that way. So yes, to maybe anticipate a question you'd give me, does that mean that Allan has to go on the floor and explain where he is on a particular problem that's been escalated to him? The answer is yes, I do. Now, sometimes I tell them we're not going to do it, because usually by the time it gets to me, it's a focus issue, priority issue, cost issue. So, somebody wants to spend money, whether it's on more people or tooling or something; I have to go to the floor or I have to go to that department and I have to explain what I'm doing on their behalf, because they gave me that problem, and I explain it. But sometimes I go along, and I say I've looked at all the budgets and I'm sorry, I cannot allow this to be spent, therefore we're going to live with this problem for a period of time. And everyone is comfortable with that because I've explained why we can't do it, and everybody understands. That is huge. It might sound time-consuming, but it eliminates just a huge noise, and it eliminates people worrying about things that they don't have to worry about. Then they get demotivated, then one thing leads to another, et cetera, et cetera. All of that, we eliminate all of that, or the bulk of it, by operating that process. CIG: control, influence, gravity. It’s an escalation tool. 

Obinna Onyeagoro: That's fantastic. It can be used for a diagnostic as well, I'm sure. I have a related question in the sense that, you know, how do you deal with scale when it comes to cultural transformations and wanting to create a strong culture? If you were at 1,000 to 3,000 to 5,000, 6,000 as you go to 20,000, what do you need to do to maintain that culture as you rapidly scale?

Allan Swan: With what I was describing on CIG, and then I mentioned we measure the same thing whether you're on the floor, in a staff job, in one of the functions, or whether you're up at the executive level, we stick to that—those principles. So, we took the Gigafactory, in the time I've been there we added six more lines. So, we went from like 25 gigawatt to 42 gigawatt and by scaling up, we just kept the same principles. We measure the same things; we grow in that space and we just operate the same way. I know it sounds super simple and why is that not changing anything, but it actually does. The only thing that you put on top of that is because of the scale; So, for example, we make 72 batteries a second in Nevada, that's over 6 million a day. That's over 2.2 billion in a year. The scale is huge. So, if something goes wrong, quite frankly, within an hour or two you've lost millions of dollars. Really fast, right? Really, really fast. 

So, with using these tools, and we don't change the tools, and these principles, we do not change them, but we are hyper-focused on any change that can cost millions of dollars. So, you could have a .02% defect issue, and you're thinking .02%, that's maybe not so bad, that could have a 10 million sticker price right on it. So, there is a sensitivity around the scale and the value per minute and per hour, that there is a definite sensitivity around that, but all those tools I've been explaining are able to operate within that scaling up. 

On the same set of targets, every department is safety, quality, cost, delivery, people: five things. And the night shift, because we operate 24/7, we measure it twice a day; one shift and then the second shift, and we always measure the same five things. Whether you're in my level or whether you're on the floor or whether you're in a function, you measure the same things. And that consistency means it’s a very easy language for everybody to understand. There's no confusion. Everybody knows their contribution and all of that drives you to quite an amazing scale, factory producing improvement after improvement, never stopping, and the winning feeling that people get is unbelievable. And we actually have a phrase: “Did you win today?” is the phrase we ask. “Did you win today?” And a lot of, most of the teams—in fact all of the teams—can say yes, they did, or no they didn't. And if they didn't, then it would be on the CIG. It's an amazing culture that we have and just seeing these people coming in day after day, 24/7 and just beating their targets and being excited about it. We obviously have a whole system of congratulating them and thanking them for everything; we've got a hi-five system and everything, and it's all-around behaviors. It is absolutely outstanding. 

Obinna Onyeagoro: That's extraordinary. So, I guess moving on from that, as a leader doing culture transformations, is it intuitive or is it art or science, right? What leadership capabilities are most critical for effectively shaping and sustaining a culture that particularly drives high performance? 

Allan Swan: No prima donnas. We don't need any prima donnas. They're going to be a problem. They are going to be a problem. So, prima donnas won't work. So, it's really interesting. You have to be very inclusive, so your mind has already got to be in that space, and I can talk a little bit more about the Japanese culture and the American culture and how we've how we tackled that. But it's not just Japanese and American, it can be any culture, right, I mean it's just that inclusive dynamic. The focus has to be on the enterprise. So, it's quite a selfless situation. You're focused on the enterprise, and by focusing on the enterprise and helping the enterprise improve, you as a human being get better and your opportunities grow. And then the last one I'd give you would be win together, so there's a big emphasis on teamwork and winning together. So, what I'm looking for when I meet people, I don't really go through any major questions, I'm just looking to see the connection between me and that particular leader. And what I'm absolutely looking for is anybody who thinks that—and I've met some amazing people who are fantastic, but they will break our culture, they will break it if we bring them in, unfortunately, and they are super, like Superwoman, Superman. I've met them. I have met them, and they are amazing, but they would break our culture. 

Obinna Onyeagoro: You talked about it a little bit already, but how do you ensure that all the leaders at all the levels are equipped to reinforce and evolve the culture in alignment with those strategic goals? Does it go back to those KPIs that you mentioned? 

Allan Swan: Obviously, we take everybody through that. We take everybody through the various training, CIG, et cetera, so they can all understand it, and they get to understand how it works. We've just did a revamp; we had Nevada, then we brought Kansas in, and we realized, to your point about scaling up, that we may have two different factories, and we don't want them competing, we want them to feel like one team. And we had a little bit of a revamp and what we did was we created a blueprint, so we looked 40 years ahead. 40 years ahead—there's no way I'll still be working after 40 years—so we looked 40 years ahead, the team and I—in fact, none of my team will be there after 40 years—and tried to create something that said this is what we're trying to achieve. So, we have a beacon, a North Star, if you like, that we're trying to achieve. 

Then—and this is going to sound really simple, but it's so effective—then we said there are four strategic drivers and there are four behaviors. So, we teach our leaders and our people, if you're working on something, it should always be one of these four strategic drivers. So, it cleans out the mess, cleans out all this other stuff. The four things you need to work on should be one of these four strategic drivers, and your behavior should adopt these four behaviors. So, we made it really, really tidy, if you like. And we teach that, and we work to that every time, and if you behave like this and you're only focused on these four strategic drivers, then we all go forward. And my biggest issue, if I can—when we bring leaders in, my number one problem, even if we've gone through the process so we know they're not prima donnas and they're going to be good people and they've got inclusive thinking and they've got one very positive impact on the enterprise, they still have an instinct that says I see how you're doing this, but I know how I got here and I know how I got this opportunity, and I've got these core values that I want to bring. 

And we accept that to a point, only to a point, because we don't want them to, you know, if someone comes in from this industry and then they go I want to do it this way, I want to go left or versus want to go right, we have to take the wonderful things they've learnt, the experience, but they still have to follow what we're teaching them and how they have to operate. To that end, when we do cultural stuff, and this was originally aimed at the Japanese and American culture but now it's blossomed into everything we do, we have three principles—and sorry, I keep talking a lot about acronyms and three principles and five principles; this one is core, respect, and alignment. 

Core is the value, your experience, who you are, your skill set, who you are as a person. So, everyone's got core. Then respect means that you're acknowledging that the person you're working with, or team you're working with, may think about things in a different way. How they tackle a problem may be different from what you're familiar with, and you give people the space and the respect, which is where respect comes from. You give them that respect because they're going to tackle it differently. And then we have alignment. So, we call it core, respect, alignment. Everyone has core. If you have respect, then you obviously make great progress, and you can operate inside our culture. If you don't have alignment, it will not work. You have to have alignment. So, in other words, you have to find a way that with these different ways of thinking, you can tackle something. What we’ve found is every leader that moved, that moved from us, that we didn't manage to keep going and keep with us, usually fell down either in respect or alignment. It was predominantly in alignment, but sometimes it was respect. And if I may go back and link it back, that's where the prima donnas would fall down, because they wouldn't have respect for someone else’s way of thinking, because they said their way is the only way and therefore, you'd start to see that crack and break. 

So, core, respect, alignment, it's a huge set of behaviors that we brought in, and they work extremely well. And you have to dedicate time for alignment. You have to dedicate time. If someone in the team isn't comfortable, you go back and have another meeting, even if that feels like why am I having, why am I having five and six meetings on the same subject? If you don't have alignment, you have to go back, because without alignment, it will break going forward. 

Obinna Onyeagoro: Those principles of core, respect, alignment, would you say those are the key principles of leading across boundaries? 

Allan Swan: Very, very much. And you have stronger characters, right. You could be in a meeting and there are some people are dominant in the meeting, and some people are quiet in the meeting. And you can see people who are very dominant; They have to turn their volume down to make sure they can get alignment with their colleagues. And in other cases, the people who are maybe a little bit more quiet, a little bit more introvert, don't really want to say so much, they have to turn the volume up a little bit. And if you create that space in that environment, then we have great success. And it's worked very, very well. Particularly and primarily, we originally found it because we were trying to figure out how do we get the Japanese culture and American culture to manage—and just as a quick anecdote here, so the American culture would be okay, tell me what I've got to do and I'm going to give you that, so like, 20% better. Meanwhile, Japanese culture be like what am I trying to do? I'm going to give you 20% worse, because I'm going to give you a number or a date or whatever it is that I can guarantee you I can deliver. So, they give you the worst case. Americans typically give us the best case and that doesn't work, right. So, you’ve got to figure out how to do it, so we came up with this core, align, respect, and then realized that actually it works everywhere, and it's been very successful, super successful. 

Obinna Onyeagoro: Are those the behaviors that would allow you to create a purpose-driven culture as well?

Allan Swan: It's interesting, I'll give you the four because the four behaviors are kind of linked back to core, respect, alignment. So, one of them is, what's the win? In other words, what are you trying to do for the enterprise? What is it you're trying to achieve? Then decide now. So that's, to your point, that's us focused on make this decision fast, as best you can, as speedily as you can, and then if we go down the wrong way, we tilt and we get ourselves back in a different space. Breakthrough. Breakthrough is about our continuous improvement, as I mentioned, with the seven principles. So, we have a continuous improvement, so we constantly set ourselves new targets, what can we do, what can we achieve, so breakthrough. And then do it together, which is emphasizing the team. So, what's the win? Decide now, breakthrough, and do it together. Those are the four behaviors that we ask people to adopt. And if you adopt them, we all go in the same direction. And like I said earlier, when you do that, the momentum and the achievements are absolutely mind-blowing. 

Obinna Onyeagoro: Can you share an example of where a strong organizational purpose kind of supercharged your team and allowed them to overcome a significant challenge or capitalize on an upcoming and emerging opportunity?

Allan Swan: So, the Nevada factory for Panasonic Energy is inside the Tesla Gigafactory, and we only make the batteries for them in that factory. And as you can imagine, our customer is pretty demanding, pretty demanding. And, so, by doing what we do, we are able to keep at the pace they want and continue to be their choice for battery, for their product in the United States. And so, therefore, the prize for us is to be their partner or their supplier in that factory and we've got to keep up with their pace, and their pace is relentless. And, so, the challenge we had is how do we take a 100-year-old Japanese company in the United States and how do we manage to be able to support a customer? And if I can use this analogy, Panasonic goes about 20 miles an hour, our customer goes 100 miles an hour, so we had to find a way of how do we get to 50 or 60 miles an hour but not, so not as slow as and as risk-averse as our core company, but not as fast as our customer, and we had to figure out a way, and the people in the factory were able to achieve that, and that was huge, and we had to be the catalyst between both. So that's probably a really good example of a challenge we faced, and we succeeded and satisfied our customer, which was our number one focus, but we did it in a cultural way that that is a little bit different from core Japan and more like our customer, but not exactly the same as them. And we had to figure it out and we did, and four and a half thousand people managed to do that. 

Obinna Onyeagoro: Kind of thinking a little bit further on that, how do you engage your employees in developing and activating your purpose, keeping culture in mind? 

Allan Swan: At a high level we do all-hands every quarter, so everyone can come to an all-hands meeting and we're there. And we describe SQCDP, so we describe the exact same metrics. It's how we do it. Then we have what we call Gemba Walk. So Gemba Walk is basically we walk the factory every single day. And I'm talking about, I do. I walk the factory. My leaders walk the factory, and there's a system that we operate. Every day we go to a different department, we go to their Board, we look at the Review Board. We can talk to them, we talk about CIG, all the stuff I've talked about, and you have this engagement for about 45 minutes every single day. So, there's a constant link back into the teams at those levels, as well as things like high five and some other things where we promote peoples’ behaviors, where there's a lot of interaction between the teams. So fundamentally, that's how we do it, so we keep reinforcing our behaviors. We're obviously operating CIG every day. So, people have to go to the boards and explain what they're doing for that team on that particular problem. And the emphasis here is we work for them, and they feel that and see that. So that's how we do it. That’s part of the cross-engagement that we pull together, and we all do it. There are some other things we do like audits on the line and some other things where the leaders audit certain aspects of the processes that everyone agrees is the most important thing to do. So, the people on the floor will do the audit, the supervisor does the audit, the General Manager then audits the supervisor, and then the executives audit the General Manager. So, we do this audit process that is not uncommon, that's very common in a lot of the automaker’s companies, so we do that too, but it's heavy engagement all the time. 

Obinna Onyeagoro: What have been some of your, you know, at least one of your greatest challenges in aligning teams from different cultural backgrounds, and what would you say your achievement was in the space? 

Allan Swan: Well, I like to tell stories, so I've got to tell you stories and sometimes they're about problems or sometimes they're about trying to achieve something. So, I’ll go at this at two different angles. I'm going to give you a problem and then I'll talk about something else. We had a great issue, where we had built our line number 14. So, we built the line, everything's ready to go, the line’s in, and we had committed to our customer that we'd have this line up in the next three weeks. So, three weeks from now we had the line coming up, and our engineers were getting really upset because the ceiling above us, they had special coating on the piping and other things, and it was falling onto the machine. 

So just for context, when you make a battery, you're in a clean room. You can't have any debris, and you can't have any moisture. It's a clean room. So, the fact that we had some debris falling from this piping, the piping coverage was a huge issue. And the engineer said we've got to stop, we've got to put a ceiling on this line; we’ve got to put a ceiling in, we have to delay it three months. Three months, and the customer's expecting it in three weeks. So, we get everybody together, using all the principles we've talked about, we get everybody together and the team figure out a way in the following two weekends, and they build a ceiling. And the way they did it, we had some contractors come in and our engineers who are PhDs, huge brains, do you know what they did that weekend? They held the ladders for people to get on top of the ladder to build the ceiling. And they didn't care, because it was all about the enterprise, and the most important thing was how do we make sure we deliver for the customer? So instead of facing a three-month issue, we were we were able over two weekends to fix that problem. 

That probably is a great example of how when you operate these principles—a PhD engineer and she's holding a set of ladders for some other person to stand up and actually put – and if you've ever laid a carpet on the floor, that's difficult. Imagine trying to put a ceiling that's 15 feet above you, that is super hard, and over two weekends they did it. That's a great example of a real problem that we're like, how are we going to fix this, and the team came up with the answer. Because it was all about what's the win? How do we do this? How do we figure it out? And they managed to figure a way out and built a ceiling in two weekends. 

Obinna Onyeagoro: That's extraordinary, unbelievable. 

Allan Swan: And then let me go a little bit further, so that's just a good, pragmatic kind of like real life; this is how this culture works. Another aspect would be this: So—and this is more a higher level, I think, if I may, and a little bit more psychological—so, as you know, to be number one, you want to be number one, so you are hunting to be number one, right; it's well-known, we're hunting to be number one. But then, when you become number one, you become the hunted. Sometimes maybe you, you know, you're not taking it easy, but maybe just take a moment and relax, et cetera, and you're being hunted. So, the people are coming after you because you were the hunter, now you’re the hunted, and that's a different mindset. 

We took it beyond that to say if you're the best and you keep focused on being the best and you work together at being the best, they can't catch you, the hunters can't catch you. So, every time you move, they move. And even if they're going, they can't get closer because you're constantly moving in front. So, we spend a lot of time being number one and focused on what are we doing next to improve? How can we improve? What does it look like? So that's the higher level of what we do. And then obviously the story of the ceiling is a good example of when you face stuff like that, how do you deal with that? But the difference between the two is, in my experience, when you're in a crisis, everybody's good, because you've got one thing to focus on, and you go after that in a crisis, and you normally can succeed. And everybody's like I wish we'd had that magic. Every day, not just in a crisis, we've created that magic. Everyday. By focusing on the improvement and what do we do next. The hunter can't get us. We just keep getting out of the way. 

Obinna Onyeagoro: That’s brilliant and exciting and really brings to life the relationship between culture as a tool for leadership, culture, and the way culture is established by behavior and how behavior drives performance ultimately. 

Allan Swan: Yes, absolutely. 

Obinna Onyeagoro: So that really brings it together in a fabulous way. So well, Allan, thank you for making the time to speak with us today. 

Allan Swan: Thank you.

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About the interviewer

Obinna Onyeagoro (oonyeagoro@heidrick.com) is a member of the global Financial Services Practice; he is based in the London office.